International VAT Guides Canada – Saskatchewan

GST Framework Canada

Compared to VAT systems we often encounter in European countries, the indirect tax framework incorporated in Canada shows significant differences. First, noticeable differences are visible in the defragmentation regarding taxability rules. 

At the national level, the Goods and Services Tax (GST) is levied at the federal rate of 5%. The federal GST is applied nationwide for most taxable products and services, uniformly approached at the country level. However, there are possible differences between what is seen as taxable and non-taxable based on the provincial tax authority interpretation. 

From a territorial (as well as fiscal perspective), Canada is organized into provinces. Almost all provinces levy provincial sales tax (PST). Six provinces have unified their tax collection systems with the federal government and introduced the Harmonized Sales Tax (HST). 

Harmonized sales tax results from federal GST and Provincial sales tax (PST). In these provinces, the GST/HST registration is made once and covers both types of taxes, i.e., federal and provincial sales tax. The reporting rules and taxability rules are uniform. However, the combined tax rates are different; they vary between provinces. 

Some provinces don’t have access to this harmonized system. These provinces(Manitoba, British Columbia, Saskatchewan) levy Provincial sales taxes (PST) separately. The PST should be collected, reported, and remitted to the provincial tax authority, following the provincial sales tax regulations. 

Quebec has a sales tax regime that is very similar to those of these three provinces. However, it has incorporated a possibility for taxable persons to reclaim input tax credits on their business purchases (which is different than in these three PST provinces).

The QST is charged, collected, and remitted according to the Quebec sales tax regulations and rules. 

The PST in Saskatchewan is called the provincial sales tax. The PST is applied to the retail sale or rental of most goods and some services. The correct way to calculate the PST is first to levy the PST on the taxable amount and then to impose federal GST. However, when conditions are met, the vendors can apply the combined GST+PST on the taxable sales amount. 

Saskatchewan Provincial Sales Tax 

In the province of Saskatchewan, the provincial sales tax is 6%. The PST applies to all taxable goods and some services consumed or used within the province’s territory. 

The Provincial Sales Tax Act and Provincial Sales Tax Regulations are the two most important pieces of legislation upon which the Saskatchewan PST is based. The federal GST applies to most taxable supplies consumed or used in the province. 

The Saskatchewan GST and PST rules indicate that most of the tangible personal property that has its place of supply in the province is part of the taxability framework for local PST. When it comes to the services, the situation is quite different. Most of the services provided to the consumer based in the province are tax-exempt. 

Saskatchewan PST

Economic operators whose place of business is within the province, outside the province but within Canada, and outside Canada, who make retail sales of taxable goods and services to customers residing there must register with the Saskatchewan Revenue Division. 

Vendors of taxable supplies should register and obtain a vendor’s PST license. Individuals or businesses occasionally making taxable supplies and purchases can be tax-registered under a registered consumer scheme. 

As licensed consumers using this registration number, these taxable persons should levy PST on their occasional retail sales, pay PST on their business purchases, and file and remit tax according to the rules for the registered consumers.

As previously mentioned, the Saskatchewan GST rules indicate that the best scenario for GST in Saskatchewan to be charged is only after the PST has been calculated for the taxable amount. GST in Saskatchewan tax provisions underline that local PST is levied on almost all sales of tangible personal property and some services. 

In the situation where the service isn’t mentioned explicitly in the PST Act as taxable or exempt, and if it is purchased together with a taxable good or service or in connection with them, the taxable amount of this service also becomes part of the purchase price of the taxable goods or services, and this part is also taxable.

Generally, all goods that aren’t exempt from PST are taxable. 

How much is GST in Saskatchewan, and PST? 

GST rate Saskatchewan: Saskatchewan GST is 5%, like in the rest of Canada. Some supplies are tax-exempt. The PST in Saskatchewan is 6%. 

PST threshold in Canada

The federal Goods and Services Act and accompanying notices define that any person carrying on a business activity in Canada with an annual GST threshold above CAD 30,000 should register for GST/HST before making any taxable sales in the province. GST threshold in Saskatchewan follows the federal rules. 

Saskatchewan Provincial Sales Tax Act and Regulation indicates that any retail business that surpasses the small trader threshold of CAD 10,000 should register for Saskatchewan PST. The small trader scheme is available only for locally established businesses or those that pass the carry-on business activity test in the province. 

PST registration threshold for resident businesses: domestic businesses or businesses that carry on business activity in Saskatchewan could use the small business scheme to remain outside the scope of the PST.

PST registration threshold for non-resident businesses: Non-resident businesses that don’t carry over a business in Saskatchewan or that don’t have a permanent establishment in the province don’t have any threshold.

PST registration threshold for foreign providers of digital services: No threshold.

A small trader scheme is only valid for natural persons who operate within the scope of C2C within their residence area. 

PST Taxable Activities in Saskatchewan

Types of taxable activities that mandate the PST registration:

• Supply of goods and services for consideration;
• Imports of goods and services; 
• Supply of defined digital services. 

Tax Representative in Saskatchewan 

Non-resident providers of digital services or products generally don’t need to appoint a local tax representative to fulfill their PST compliance responsibilities.

Tax registration 

General Registration Regime

Economic operators that should obtain a PST license could submit the registration using the eTax services developed by the Saskatchewan tax authority. The registrant that followed the eTax services for registration could use the same portal to submit tax returns and related payments of owed tax.

Alternatively, the Revenue Division permits businesses to register via mail and similarly submit returns and related payments.  

Vendors that cannot access the small business scheme and sell or make taxable supplies in Saskatchewan to customers who acquire these goods or services for personal consumption should register with Saskatchewan Finance, collect PST, and file the PST return.

PST on Electronically Supplied Services 

Digital Services

Providers of digital services and digital tangible personal property that make these supplies available to customers residing in the province should register for PST and levy PST at 6% for their taxable supplies. 

It should be noted that when the services or tangible personal property are labeled as tax-exempt if provided in a “traditional,” not digital manner, they will probably also be tax-exempt when supplied through digital means. 

Compared with the indirect tax framework for non-resident providers of digital services or products, the Saskatchewan PST rules are pretty broad. The scope of PST includes non-resident providers of digital services, most electronic distribution platforms(that enable or facilitate the supplies of digital goods or services), online accommodation platforms, and marketplace facilitators(enablers or facilitators of concerned supply).

How much is GST in Saskatchewan for cross-border digital services?

Saskatchewan GST rate: The Saskatchewan GST rate for the supply of intangible goods or digital services is 5%. 

How much is PST in Saskatchewan for cross-border digital services?

Saskatchewan PST rate: 6%

Digital Platform Operators Rules 

Non-resident marketplace facilitators, operators of electronic distribution platforms, and online accommodation platforms are obligated to register, charge, collect, and remit PST for direct supplies as well as supplies of taxable goods and services that they enable to be carried on through their platform by the marketplace vendors or providers of services to the customer based in Saskatchewan. 

In the tax-based scenario, when the e-marketplace facilitator or accommodation platform operator is registered for PST, the marketplace seller or accommodation provider that exclusively manages their supplies through the platform has the possibility of not registering for PST. 

Licensed for PST marketplace facilitator, accommodation platform, and e-marketplace operator should charge, collect, and remit all PST for taxable supplies made through the platform. 

Marketplace facilitators and operators of electronic distribution and online accommodation platforms must be licensed to collect and remit Saskatchewan PST. This obligation remains even when the marketplace seller or accommodation provider is registered for PST.

When the accommodation provider or marketplace seller makes taxable supplies through different channels(other than through a licensed platform), it remains his responsibility to charge, collect, and remit provincial sales tax correctly. 

PST applies to all taxable retail sales made through online sales platforms.

Invoicing Rules

General invoicing rules are accepted on the federal level, considering the content of the invoice also extends to the GST Saskatchewan framework. Depending on the type of taxable transaction, some additional fields should be added according to the PST rules. 

Invoice Requirements in Saskatchewan 

The pdf invoice should at least contain the following:

General information: 

• Date of invoice issuance; 
• Date and time of supply;
• Unique invoice number from consecutive series.

Seller information:

• Company name;
• Full address (head office);
• Billing address if different from company address;
• PST number.

Customer information:

• Name; 
• Full address;
• PST number (if applicable).

Fiscal Information:

• Tax amount for each type of goods or services supplied;
• Federal Tax Rate;
• PST tax rate;
• Type of the transaction by reference to the categories indicated in the GST rules;
• Total PST amount; 
• Invoice Total tax exclusive;
• Rate of any discount;
• Total invoice amount. 

Foreign Currency Invoice in Saskatchewan

In most cases, the invoice should be issued in national currency. When permitted to be issued in foreign currency, the GST/HST, total, and price of goods/services should be indicated in local currency.  

PST return 

Standard Return 

Suppliers of taxable goods or services, as well as registered consumers, are required to register for PST following the alternative registration routes and to file a tax return on a monthly, quarterly or annual basis, depending on the amount of tax collected or payable. The filling frequency is based on the calendar year and is defined following the collected or payable PST: 

• Monthly threshold – above CAD 12,000;
• Quarterly threshold – CAD 4,800 – 12,000, and;
• Annual threshold – below CAD 4,800.

The Revenue Division should transmit the tax return to each taxpayer after the designated reporting period ends. Returns can be filed online using the eTAX service, or the return can be filed by mail.

The due date for PST returns that are filed and paid electronically is the last day of the month following the prescribed reporting period.

However, the due date for non-online filing of tax returns and concerned payment is the 20th day of the month following the end of the prescribed reporting period. 

PST reporting for non-resident digital suppliers

Penalties for late reporting and omitted declarations 

Non-resident vendors that don’t respect the prescribed reporting deadlines for submission of tax returns and due dates for payment will most likely be exposed to tax audits, which could result in payment of penalties and interest above the tax payable.

Penalty and interest penalty according to Saskatchewan Sales Tax rules:

Late filing and payment: A penalty of 10% is applied for late payment of non-remitted tax to each return period, to a maximum of CAD 500 for each period;

Late filing and payment: Interest is applied to non-remitted tax at the prime interest rate plus 3% and is updated twice a year. 

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